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Tag Archives: Eleventh Circuit

An Assessment of Security Procedures – Eleventh Circuit Reversal of Safe Harbor Application Finding

Posted by Jennifer N. Toussaint on Posted in Uncategorized

For banks operating in Florida (or other jurisdictions with similar provisions regarding security procedures for payment orders), the Eleventh Circuit has recently issued an opinion that may call into question the validity of existing security procedures and the corresponding applicability of the safe-harbor risk shifting provision of Fla. Stat. §670.202.

In Chavez v. Mercantil CommerceBank, N.A., No. 11-15804 (11th Cir. Nov. 27, 2012) Plaintiff Chavez filed suit seeking recovery of funds fraudulently transferred from his account with Mercantil to a third party. Under §670.202(2), banks are relieved from liability for fraudulent payment orders if the bank follows established (and agreed upon) security procedures in good faith and the procedure is considered commercially reasonable. While Mercantil succeeded in asserting §670.202(2) as an affirmative defense on the district court level, the Eleventh Circuit reversed – finding that the established security procedure did not meet the standards articulated by Fla. Stat. §607.201. According to the Eleventh Circuit, the established procedure agreed upon by Mercantil and Chavez – delivery to the bank of a written payment order containing the proper signatures by an authorized representative, and, in the event of delivery via electronic means, a telephone call back by the bank to identify the identity of the representative – did not meet the requirements of §670.201, which at a minimum expressly states that “the comparison of a signature or the communication with an authorized specimen signature is not by itself a security procedure.”

The Eleventh Circuit’s analysis and interpretation of Fla. Stat. §§607.201 – 670.202 may prove helpful in evaluating the existing security measures of financial institutions facing similar obligations and ensure the applicability of safe-harbor provisions that prove to greatly limit risk and liability.

Eleventh Circuit Recognizes Individual Sale of Item over the Internet as Both a Commercial and a Consumer Transaction

Posted by Samantha Powers on Posted in Fair Debt Collection Practices Act

In a recent case before the Eleventh Circuit (Oppenheim v. I.C. System, Inc.), the court upheld a jury award of $1,000 in statutory damages and $20,986.21 in attorneys fees and costs against the defendant – a debt collector hired by PayPal to collect monies owed by plaintiff pursuant to PayPal’s contract for services.

Plaintiff used PayPal to process payment for the sale of his laptop to another party over the Internet. After PayPal deposited the payment amount into plaintiff’s personal checking account, it was discovered that the payment was fraudulent. Pursuant to the User Agreement between PayPal and plaintiff, plaintiff assumed the risk for any bad payments. PayPal attempted to exercise its contractual right to reverse the transaction. When plaintiff refused to repay the funds, PayPal hired the defendant, I.C. System, Inc., to collect. Later, plaintiff sued I.C. System, Inc. under the Fair Debt Collection Practices Act (FDCPA) and the Florida Consumer Collection Practices Act (FCCPA) for alleged illegal debt collection practices.

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Ninth Circuit Creates Split About the Meaning of the Word “Sue” as Used in the CROA

Posted by Sonia Salinas on Posted in Credit CARD Act

The Credit Repair Organizations Act (CROA), found at 15 U.S.C. § 1679, was enacted to ensure consumers of services of credit repair organizations are provided with the information necessary to make informed decisions regarding the purchase of such services; and to protect the public from unfair or deceptive advertising and business practices by credit repair organizations. Section 1679c of the

CROA requires that credit repair organizations make certain written disclosures to consumers including that consumers have “a right to sue a credit repair organization that violates” the CROA. The CROA also contains a provision that voids any waiver by consumers of rights provided in the CROA. In a recent decision, Greenwood, et al. v. CompuCredit Corp., —F.3d—, 2010 WL 3222415 (9th Cir. Aug. 17, 2010)(Thomas, J.), the Ninth Circuit disagreed with decisions from other circuits about whether arbitration agreements between credit repair organizations and consumers are enforceable when a consumer sues for violations of the CROA. Specifically, there is now a dispute among the circuits about what the word “sue” means as used in the CROA. Does the word “sue” as used in Section 1679c create a right for consumers to sue in court; or does the word “sue” encompass dispute resolution through arbitration?

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Eleventh Circuit Interprets the FDCPA and Florida’s Consumer Collection Practices Act

Posted by Rebecca Hanson on Posted in Fair Debt Collection Practices Act

The Eleventh Circuit Court of Appeals recently issued an opinion involving the Fair Debt Collection Practices Act (“FDCPA”) (15 U.S.C. §§ 1692-1692p) — LeBlanc v. Unifund CCR Partners. The Eleventh Circuit affirmed the district court’s holding that a violation of Florida’s Consumer Collection Practices Act (“FCCPA”) (Fla. Stat. Chapter 559) may support a federal cause of action under the FDCPA. The court, however, limited its decision by noting that not all violations of state law constitute per se violations of the FDCPA because “the conduct or communication at issue must also violate the relevant provision of the FDCPA.”

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Eleventh Circuit: Rooker-Feldman Doctrine Bars Post-Foreclosure TILA Recission Claim

Posted by Martin J. Bishop on Posted in Truth in Lending Act

In Parker v. Potter, the United States Court of Appeals for the Eleventh Circuit has held that the Rooker-Feldman doctrine bars a district court from hearing a rescission claim under the Truth in Lending Act (TILA)

Plaintiff Yolanda Parker’s husband, Gary, refinanced his Clearwater, Florida home with Money Consultants, Inc., which immediately assigned the note and mortgage to Defendant Nancy Potter.  Gary subsequently quit-claimed the home to himself and Yolanda. A short while later, Potter proceeded with foreclosure proceedings which, after Yolanda failed to have them restrained by court order, concluded with a Florida court entering a judgment of foreclosure against Gary and Yolanda Parker. Approximately nine months later, Yolanda sent a letter to Potter stating her intent to rescind the foreclosed mortgage under TILA.  Potter nonetheless pursued a foreclosure sale, at which she  purchased the property, then subsequently sold to a third party.   

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Eleventh Circuit Certifies Questions Regarding The Enforceability Of A Class Action Waiver To The Florida Supreme Court

Posted by Martin J. Bishop on Posted in Class Actions

In Pendergast v. Sprint Nextel Corporation, Case No. 09-10612 (11th Cir. Jan. 4, 2010), the Eleventh Circuit found that there were unsettled questions of Florida law as to whether a class action waiver was procedurally or substantively unconscionable or void for other reasons and certified the following four questions to the Florida Supreme Court:

  1. Must Florida courts evaluate both procedural and substantive unconscionability simultaneously in a balancing or sliding scale approach, or may courts consider either procedural or substantive unconscionability independently and conclude their analysis if either one is lacking?
  2. Is the class action waiver provision in Plaintiff’s contract with Sprint procedurally unconscionable under Florida law?
  3. Is the class action waiver provision in Plaintiff’s contract with Sprint substantively unconscionable under Florida law?
  4. Is the class action waiver provision in Plaintiff’s contract with Sprint void under Florida law for any other reason?

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